This Act is specially enacted to accommodate the needs of industrial, commercial, and agricultural financing and the use of and benefit from personal property, and to safeguard the security of personal property secured transactions.

"Personal property secured transaction," as used in this Act, means a transaction in which, in accordance with this Act, a mortgage is created on personal property, or a conditional sale of such property is made, or possession of the property is taken under a trust receipt.

Personal property secured transactions shall be subject to the provisions of this Act. Transactions not provided for herein shall be subject to the provisions of the Civil Code and other laws.

Machinery, equipment, tools, raw materials, semi-finished products, finished products, vehicles, forestry, fishery, agricultural, and livestock products, livestock, powered vessels with total tonnages of less than 20 tons, and non-powered vessels with total tonnages of less than 50 tons may each be the subject property of a personal property secured transaction.
The designations of products under each of the categories of subject property in the preceding paragraph shall be determined by order of the Executive Yuan in consideration of actual needs and the nature of given transactions.

When work is contributed to, or something is joined or mixed with, the subject property of a personal property secured transaction, the effect of the personal property in securing a claim extends to the work contributed to or the thing joined or mixed with the subject property, to the extent of the original value.

A written contract shall be entered into for a personal property secured transaction. Unless registered, a personal property secured transaction shall not be effective against a bona fide third party.
When a creditor takes possession of or retrieves the subject property of a personal property secured transaction in accordance with this Act, a bona fide lienholder's expenditures for repair or addition of work to the subject property of the personal property secured transaction, when the value of the personal property is increased thereby, shall be given precedence of satisfaction, to the extent of the increase in value, over any personal property secured rights that were previously established in accordance with this Act.

The registration authority for personal property secured transactions shall be designated by the Executive Yuan.

The registration of a personal property secured transaction shall be filed by the parties to the contract, providing the contract or a duplicate thereof with the registration authority.
The registration authority shall make a notation of the date of receipt on the contract or a duplicate thereof, and shall retain the contract or a duplicate thereof on file for reference. It shall maintain a registry in which it registers the names of the individuals or entities that are parties to the contract and their respective domiciles, residences, or places of business, the date the contract was entered into, a description of the subject property, its price, the amount of the secured claim, and the date of termination.
The registry of the preceding paragraph shall be indexed, and parties to a contract or other third parties may at any time check or copy the contract registration information at the registration authority.

When an application for registration of a personal property secured transaction does not comply with the regulatory requirements, the registration authority shall specify the reasons and order that the application be supplemented within a specific deadline. When no supplementation or insufficient supplementation has been made at the time of the deadline, the registration authority shall dismiss the application.

The registration authority shall publish on a website or shall in another appropriate manner publicly announce the names of the individuals or entities that are parties to the contract, a description of the subject property, the amount of the secured claim, the date of contract formation, the date of termination, and any other necessary information.

The effective period of registration of a personal property secured transaction shall be as stipulated by the contract; if not stipulated by the contract, the effective period shall be one year from the date of registration. Within 30 days prior to the end of that period, the creditor may apply for an extension of the registration period, which shall be effecttive from the day following the end of the original registration period.
The effective period of an extension of the registration period as stipulated in the preceding paragraph may not exceed one year. The registration authority shall handle the extension of the registration period in accordance with Articles 7 and 8, and notify the debtor. If the subject property is owned by a third party, the third party shall also be notified.

After the secured claim has been satisfied, the creditor, at the written request of the debtor or an interested party, shall immediately issue evidentiary documentation. The debtor or the interested party may use the evidentiary documentation as the basis for cancellation of the registration with the registration authority.
A creditor that does not deliver the evidentiary documentation within 10 days from receiving a request under the preceding paragraph shall bear liability for damages.
When a creditor refuses to deliver the evidentiary documentation of paragraph 1, the debtor or interested party may use other means sufficient to demonstrate that the debt has been satisfied to cancel the registration with the registration authority.

The registration authority shall collect an administrative fee for any registration, checking, copying, or issuance of certificates in relation to personal property secured transactions; the fee standards shall be set by the Executive Yuan.

During the duration of the contract for the personal property secured transaction, the possessor of the personal property shall keep custody of or use the subject property with the due care of a good administrator.

The benefits and risks of the subject property of a persoanl property secured transaction shall be assumed and borne by the possessor of the personal property, provided that if the contract stipulates otherwise, the contract stipulations shall govern.

Any contractual stipulation under which the debtor of a personal property secured transaction waives any right provided in this Act shall be void.